Texas Instruments (TXN) said second-quarter results were below expectations, and warned that apprehension about a global economic slowdown weighed down customer demand.
The company forecast third-quarter earnings in the range of 34 to 42 cents a share, on revenue between $3.21 billion and $3.47 billion, below the Street’s expectation for earnings of 50 cents a share on revenue of $3.54 billion.
"Although we believe customers and distributors have low inventory levels, the global economic environment is causing both to become increasingly cautious in placing new orders,” said Rich Templeton, chairman, president and CEO of TI in a statement. “Our backlog grew last quarter but orders slowed in the month of June and our backlog coverage for September is lower than normal.”
Templeton went on to warn that third-quarter revenue would be even with last quarter and below the average growth rate for the quarter, and mentioned that the company has a strong inventory and available manufacturing capacity and short product lead times which will allow TI to respond should customer demand ramp up mid-quarter.
The semiconductor giant saw second-quarter profit fall to $446 million, or 38 cents a share, down from last year’s profit $672 million, or 45 cents a share, as revenue slipped to $3.34 billion, down from year-ago sales of $3.46 billion
The results missed expectations on both the top and bottom line; analysts polled by Thomson Reuters had predicted earnings of 41 cents a share on revenue of $3.35 billion.
Shares of Texas Instruments are down nearly 8% so far this year. The stock fell 1.6% during the regular session Monday, and was down 1% in after-hours trading.